The US Securities and Exchange Commission (SEC) is set to make its final ruling on VanEck’s spot Ethereum ETF this week, with the outcome potentially resting on a single vote, akin to SEC Chairman Gary Gensler’s vote in favor of spot Bitcoin ETFs in January. The five commissioners, including Gensler, will cast their votes on May 23, and their positions on cryptocurrencies may offer some insights into the possible outcomes.
Key SEC Members and Their Positions on Cryptocurrency
Hester Peirce, also known as “Crypto Mom,” has consistently been a proponent of cryptocurrencies. While her vote on the spot Ethereum ETF has not been confirmed, her involvement with the Ethereum community and her criticisms of the SEC’s regulatory approach suggest that she may vote in favor.
On the other hand, SEC member Caroline Crenshaw, who has been critical of the cryptocurrency industry, is expected to maintain her stance. Crenshaw opposed the approval of spot Bitcoin ETFs due to concerns about market manipulation and lack of regulation, and there is no indication that her position has changed. Therefore, it is likely that she will vote against the spot Ethereum ETF.
Mark Uyeda, like Peirce, has criticized the SEC’s regulatory tactics. Despite his concerns about the decision-making process, he voted in favor of spot Bitcoin ETFs. While his vote on the spot Ethereum ETF is uncertain, his support for spot Bitcoin ETFs suggests that he may lean towards approving it.
Jaime Lizarraga, another SEC member, has opposed spot Bitcoin ETFs and expressed doubts about the role of cryptocurrencies in financial inclusion. He views most cryptocurrencies as securities and believes they operate illegally, making it unlikely that he will support the spot Ethereum ETF.
Chairman Gary Gensler, who voted in favor of spot Bitcoin ETFs, may have been influenced by Grayscale’s successful appeal against the SEC. However, his stance on the spot Ethereum ETF is less clear. Gensler has refrained from clarifying the regulatory status of Ethereum and is under pressure due to an ongoing investigation into its classification.
Potential Outcomes and Market Impact
Gensler’s vote is crucial and could ultimately determine the outcome. The SEC’s approach to spot Ethereum ETFs is being closely scrutinized, as there are conflicting signals within the commission. Some fund managers anticipate a rejection, citing the SEC’s comparatively lower engagement with spot Bitcoin ETF applications.
According to analysts from Bloomberg, Eric Balchunas and James Seyffart, there is a 25% chance of approval for at least one spot Ethereum ETF on May 23. This represents a significant decrease from the 70% likelihood predicted at the beginning of the year.
Unsurprisingly, the SEC’s decision will have significant implications for the cryptocurrency market. Approval of the spot Ethereum ETF could legitimize Ethereum as an investment asset, similar to the impact of the spot Bitcoin ETF approval. Conversely, a rejection would heighten the regulatory challenges faced by cryptocurrencies in the US.
Please note that this article does not constitute investment advice, and investors should be aware that cryptocurrencies carry high volatility and risk, and should conduct their own research.